Lorenzo Protocol has recently unveiled a detailed incentive program, inviting more users to explore its innovative and simplified BTC management and yield generation mechanisms. The protocol aims to build the first Bitcoin liquidity financial layer within the Babylon ecosystem, offering crypto investors a seamless liquid staking experience for their BTC assets. Regardless of the amount held, users can easily stake Bitcoin to earn secure native staking rewards while participating in the Lorenzo DeFi ecosystem for diverse incentives and returns.
To foster ecosystem growth, the newly introduced incentive plan encourages broader participation. This initiative is designed to onboard users into Lorenzo’s streamlined system for Bitcoin management and passive income generation.
Core Participation Methods
Users can engage with Lorenzo Protocol in two primary ways to maximize benefits and returns.
- Bitcoin Staking: Users stake BTC or other wrapped BTC assets (as required by specific staking plans) on the Lorenzo platform. In return, they receive liquid staking tokens issued by Lorenzo.
- DeFi Ecosystem Participation: Users can utilize their received stBTC—Lorenzo’s principal liquid staking token—to participate in various projects within the Lorenzo DeFi ecosystem. This approach opens doors to additional incentives and optimized yields.
Both methods leverage Lorenzo’s unique tokenization model for distributing rewards.
Tokenizing Incentives with Lorenzo
Lorenzo’s liquid restaking tokens introduce an innovative principal-and-yield separation mechanism. By tokenizing staked Bitcoin into Liquid Principal Tokens (LPTs) and Yield Accrued Tokens (YATs), the protocol enhances Bitcoin’s financial utility and liquidity.
Liquid Principal Tokens (LPT)
LPTs represent the right to reclaim the staked Bitcoin principal after the staking period concludes. For example, if a user stakes 10 BTC, the LPT issued entitles them to recover those 10 BTC upon maturity.
stBTC as the Official LPT
To prevent liquidity fragmentation, Lorenzo Protocol designates stBTC as its official Liquid Principal Token. stBTC is pegged 1:1 to the staked Bitcoin, aggregating liquidity from all staked assets within the ecosystem.
Yield Accrued Tokens (YAT)
YATs are designed to incentivize user participation in staking and acquiring stBTC. Each YAT accumulates yield from Bitcoin restaking activities and represents the right to claim rewards after the staking period.
Since YATs are freely tradable, holders can use them across other DeFi applications, enhancing their utility and flexibility.
Ecosystem Participation Rewards
The Lorenzo incentive plan consists of two core components: YATs and Points.
YATs (Yield Accrued Tokens)
- Purpose: Incentivize user participation in staking plans.
- Function: Represent rewards claimable after the staking period, including native rewards from the staking plan and Lorenzo token airdrops.
Lorenzo Points
- Purpose: Encourage user staking and DeFi ecosystem engagement.
- Function: Primarily used for future project token airdrops and other utility scenarios.
Understanding the Points System
Lorenzo’s points system is structured to reward users for staking and utilizing stBTC across various activities. Below is an overview of earning opportunities.
Base Points
Base Points are earned by staking BTC and other wrapped BTC assets. Rules for base points may be adjusted based on campaign arrangements, with updates communicated promptly.
Ongoing Campaign: Pre-Staking for Babylon
- Users earn 1,500 points per staked BTC per day.
- Points are allocated proportionally based on the staked amount and actual participation days.
- For instance, staking 1.2 BTC for 9 days yields 16,200 points (1,500 × 1.2 × 9).
- Users staking beyond 20 days continue earning at the rate of 1,500 points per BTC daily.
Note: BTC in the pre-staking pool can be redeemed after August 31, 2024.
Referral Points
Each user receives a unique referral code to share. Successfully referring a new user grants:
- 20% of the referee’s base staking points to the referrer.
- An additional 5% base points bonus for the referee.
Early Bird Points
Early participants qualify for multiplier bonuses:
- LRZ Supporters: Double points for the first 7 days of staking.
TVL Campaign Waitlist:
- Top 100 stakers: 5x points.
- Top 1,000 stakers: 2.5x points.
- Top 10,000 stakers: 1.25x points.
Note: Early Bird points apply to the pre-staking Babylon campaign.
Collaboration Points
Dedicated point allocations are reserved for specific partnership programs. Details will be announced in official collaboration updates.
Examples:
- Babylon Pioneer NFT holders share an additional 5% points pool.
- Users introduced via partners like Particle Network may receive extra points.
Campaign Bonus Points
Lorenzo periodically hosts joint campaigns to incentivize stBTC holders engaging in DeFi activities. Only stBTC TVL contributing to business goals is considered, with point standards varying per project.
Guidelines:
- Point details are announced per campaign.
- Multiple snapshots of stBTC TVL across ecosystem partners are taken during campaigns.
- Users earn points based on their stBTC contributions during each snapshot.
Community Points
Active participation in community activities and development can yield additional points. Specific rules are shared via community announcements.
Other Points
Any additional point arrangements will be communicated through official project channels.
At the time of publishing, some points dependent on partner information are pending. Lorenzo will provide timely updates as details become available.
YAT Yield Explained
YAT represents the basic interest earned from staking, incentivizing users to acquire stBTC. All BTC and wrapped assets staked via Lorenzo will be restaked on Babylon after its mainnet launch, subject to Babylon’s staking limits. Stakers receive stBTC equivalent to their staked BTC amount.
Pre-Staking Babylon Campaign Details
- The ongoing pre-staking campaign combines YAT收益 with the points system.
- The displayed annual percentage yield (APY) is shown in the official dApp.
- The campaign has a cap of 250 BTC.
- YAT收益 is distributed proportionally based on staked amounts.
- Lorenzo has allocated up to $1.5 million equivalent in YAT收益, comprising Babylon native staking rewards and Lorenzo token airdrops.
- Yield calculation: $1.5 million equivalent airdrop divided by the total BTC staked in the pre-staking pool.
- Redemption for pre-staked BTC opens after August 31, 2024. If Babylon mainnet launches earlier, staked BTC follows Babylon’s lock-up rules.
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Frequently Asked Questions
Q1: What constitutes the rewards for staking users?
Rewards include two components: YAT (basic staking interest) and points earned through staking. Additionally, using stBTC in DeFi activities can generate further incentives.
Q2: If I bridge stBTC to another ecosystem for DeFi, will I lose my staking points?
No, staking points are tied to your original EVM address and remain intact.
Q3: Does selling stBTC affect my rewards and points?
Points are address-bound and unchanged. YAT-based rewards are separate and unaffected by stBTC sales.
Q4: Do secondary market purchases of stBTC qualify for staking rewards or points?
No. YATs and points are designed to incentivize initial staking participation, not secondary market activity.
Q5: After withdrawing stBTC, do I continue earning interest or points?
No new interest or points are generated after withdrawal. You can redeem accumulated YAT for interest tokens based on your share of the total YAT pool. Re-staking BTC is required to earn new yields.
Q6: What advantages do early participants have?
Early users accumulate base points faster and qualify for time-weighted point multipliers, enhancing their overall rewards.